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Thursday, December 8, 2016

Drilling Advances Pershing Gold's Relief Canyon

Pershing Gold's advancements in the Relief Canyon project in Nevada over the last month have caught the attention of several analysts.

Pershing Gold Corp. (PGLC:NASDAQ; PGCL:TSX) announced results of phase 1 of its 2016 drill program at Relief Canyon in Nevada on Nov. 9. "Phase 1 of our 2016 Drilling Program continues to successfully extend the in-pit mineralization at Relief Canyon," stated Stephen D. Alfers, Pershing Gold's chairman, president and CEO, in the news release. "Offsets further extend to the west the high-grade zone discovered in the North Target Area in 2015."

Alfers also announced that the company had begun drilling phase 2 of the program. "Phase 2 will test targets to the south and east of the pits and has the potential for satellite discoveries that could be a source of future production at Relief Canyon's existing state-of-the-art processing facilities," he stated.

Bhakti Pavani of Euro Pacific Capital noted on Nov. 10 that "three of the eleven [phase 1] drill holes. . .have intersected high-grade intercepts. These intercepts are located within the oxide or mixed zones of the deposit and have cyanide leach gold values which indicate leachable material." He observed that "the phase 2 drill program is primarily an exploration program focused towards exploring the satellite deposits on the land package. . . it is also the Company's first drilling program that is targeted both towards development and exploration."

Heiko Ihle of Rodman and Renshaw noted in a Nov. 10 company update that some of the phase 1 holes "were drilled in an effort to test the metallurgical potential of higher-grade zones which are currently excluded from the resource estimate. Management has indicated that initial metallurgical work in these areas has proven to be promising, leading us to believe that additional ounces could be added to Relief Canyons resource estimate in the future."

On the phase 2 driling, Ihle stated that "the firm plans on drilling targets that have been identified during 1H16, leading us to believe that Phase 2 should be focused more on the discovery of new resources. . . given that we feel any potential discovery could be brought online in the first few years of Relief Canyon's mine life, we expect to monitor results of Phase 2 closely."

Heiko Ihle said he expected a catalyst-rich fourth quarter: "Going into the end of 2016 we expect strong news flow with respect to reaching a production decision. Most notably, we anticipate the release of a Pre-Feasibility Study (PFS) for Relief Canyon towards the end of 2016 or early 2017, at which point we expect to revisit our current model for the mine."

CEO Alfers told The Gold Report that he expects the PFS to be released in January.

BMO Global Mining, in a Nov. 11 note from its Equity Sales and Trading Desk, stated the project is "a simple open-pit, heap-leach development story in Nevada, but one that stands out vs. peers as it has a full, new, process facility and infrastructure already in place, and therefore has very low remaining capital requirements and excellent economics." The preliminary economic assessment, the BMO report noted, "outlined a robust open pit heap leach project producing ~90koz/yr at $709/oz AISC. With infrastructure / process plant already in place, capital costs are expected to be just $12-$22 Million."

Concerning permitting, the BMO report observed that "a Phase I permit modification was approved in Q3/16 and expands the permitted pit boundary and drilling areas. A Phase II permit will be submitted in late 2016. Further permit changes/updates will likely be needed (as is fairly standard in Nevada), and we see this risk as low. We note a potential change in land ownership structure from the state into private hands could de-risk the area further."

The BMO report also mentioned an upcoming Toronto Stock Exchange listing, noting, "the name is underowned in Canada and the company is now focused on improving its profile, adding research coverage, and targeting new institutional investors." Trading on the TSX commenced on Nov. 17, and according to CEO Alfers, "the Company's listing on the TSX is a keystone event that will allow us to continue to build liquidity for the Company and to diversify our strong shareholder base."

Since the TSX listing, Pershing has signed a nonbinding commitment with Sprott Resource Lending for a $20 million credit facility and today announced the closing of a public offering of common stock. "The gross proceeds to Pershing Gold from this offering is approximately $7.5 million, before deducting the underwriter's discount and other estimated offering expenses payable by the Company," Pershing announced in the release.

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Pershing Gold Corp. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
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